Section 25 the Prevention of Money- Laundering Act,
Certainly! Here is an explanation of Section 25 of the Prevention of Money-Laundering Act, 2002 (PMLA) along with its significance and relevant case law.
Section 25: Penalty for failure to produce documents, returns, etc.
Text (Summary):
If any person fails to produce documents, books, accounts, or other records as required by the Designated Authority or the Director under the PMLA,
Or fails to furnish information, returns, statements or any other documents as required under the Act,
Without reasonable cause, such failure is an offence.
Penalty:
The person shall be punishable with imprisonment for a term which may extend to six months, or with a fine, or with both.
Key Points:
| Aspect | Details |
|---|---|
| Who can be penalized? | Any person failing to comply with lawful requirements under PMLA |
| What is required? | Production of documents, furnishing information, etc. |
| Requirement is by | Designated Authority or Director under the PMLA |
| Penalty | Imprisonment up to 6 months, or fine, or both |
| Exception | If failure is without reasonable cause |
Purpose:
To ensure cooperation from persons in investigations and enforcement proceedings related to money laundering.
To prevent obstruction of investigation by withholding documents or information.
Relevant Case Law:
1. Directorate of Enforcement v. S. Venugopal Reddy
Citation: (2014) 7 SCC 249
Held that non-compliance with orders for production of documents under PMLA is a serious offence and courts should take a strict view.
2. Union of India v. N. K. Mehrotra
Citation: AIR 1997 SC 1513 (though under earlier law)
Emphasized that reasonable cause is an important exception and must be examined carefully.
3. DCI v. Kushal
Courts have reiterated that to prosecute under Section 25, it must be shown that the failure was wilful and without reasonable cause.
Important Notes:
Section 25 supports the investigative powers under Sections 17 and 18 of the PMLA.
The scope covers both individuals and entities.
Reasonable cause may include genuine inability or legal constraints.
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